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Friday, August 24, 2012

Is Working at Home Productive?

Many of you know that I often work at home or at a coffee shop because distractions at the office make it difficult to write or conduct other forms of research. However, many employers believe that productivity would plunge if they allowed their employees to work at home. There are other factors to consider, however. Not only do employers need to take into account whether employees are more or less productive, but they also need to consider the rent they would save if a large number of their employees worked at home. That is, if the savings derived from lower rental payments offset the expected drop in productivity, then letting employees work at home would still make economic sense.

The assumption that productivity will drop may be wrong, however. James Liang (founder and chairman of Ctrip, a big Chinese travel website similar to Expedia, and Nicholas Bloom, a labor economist at Stanford, along with co-authors John Roberts and Zhichun Jenny Ying, recently completed a study called “Does Working From Home Work? Evidence From a Chinese Experiment,” in which Ctrip employees were randomized into work-at-home groups and work-at-the-office groups, and they found that employee productivity did not drop. In fact, it increased by 13%. Moreover, another study by Christine Hoehner, a public-health professor at Washington University, found that commuting is bad for our health.

All this and more is covered in the latest Freakonomics podcast, which you can listen to here ("There’s Cake in the Breakroom!") and is only 6:28 minutes long. You can also download it from iTunes.

2 comments:

  1. It seems to me that it depends a lot on what you are doing. I have worked at home more than not during my career and something, for me at least, are conductive to it and some not. Task oriented jobs might be more productive at home but those requiring management, frequent modifications and social input would not. I looked at the commuting study and it was about commuting by car. I LOVE going to work every day after working at home for years. It is a 15 minute walk to the train, a short train ride and I am there in an other 5 minute walk. The commute requires me to walk 40 minutes a day so that does not fit her data. This is ordinary for people that live in NYC, SF and other cities as more and more people are. I don't think it is easy to make generalizations about this but someone working at home would be severely restricted in social mobility within any organization. It is not always a bad thing. At my company if I have something that is just focused work I need to spend time on and not get interrupted I work at home but otherwise I need to constantly be getting feedback about the organization. They both have advantages in different circumstances.

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  2. I'm sure the authors of both studies would agree. Nevertheless, there study challenges a lot of conventional employer wisdom that many employers would do well to take into account (JetBlue is another company who has a large number of employees who work from home).

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